How to buy a used car – Financial Management – close up photo of car

How to buy a used car
(without being taken for a ride)

A 10 minute read • Rob W

Part of our financial management series. Did you know that 1 in 3 vehicles has a hidden past1? Did you know that if you buy a vehicle that has outstanding finance you are at risk of losing that vehicle and all the money you paid for it?

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If you want to know how you can avoid the common pitfalls of buying a second hand vehicle, then this article is for you [Editor: resources mentioned are relevant to UK readers].

Purge your emotions

When you’re buying anything you will likely start to convince yourself it’s worth more than it is, because you want it. Emotions will get involved, so try to remove the emotions. Worse still, if you’re buying from an auction it will likely amplify your feelings, as adrenaline kicks in.

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Buying a vehicle usually involves a significant sum, if you can control your emotions then you can save yourself a lot of money.

You might start justifying paying extra because “well, it has a nice new stereo”, or “I’ve driven all the way here, so I might as well buy it!”, or “I think it’s worth about three grand – it must be?”.

Once you know the right price you can use that as your inner Yoda to pull you towards the light-side.

Research the price

One of the easiest sites to perform pricing research is Parkers used car pricing guide2. All you need to do is

  1. Put in your registration
  2. Confirm the make, model and year
  3. Enter your email, name, mobile number and postcode.

The website will show the estimated price, but you’re not quite finished yet.

How to buy a used car – Financial Management – Parkers Guide

Once you have the typical guide price, you can adjust it. One variable is whether the vehicle has below average, or above average mileage. You also need to decide what condition the vehicle is in – clearly a vehicle in poor condition is worth less.

If the vehicle has some extras, like optional factory fitted heated seats, it can bump the price up. Parkers state that

“An adjusted valuation provides you with an accurate estimate of your car’s value, based on an exact mileage and the optional extras that are fitted to it. Without this information, the value of your car could differ by as much as 30% to the free valuation you received.”

Yep, you guessed it, you must pay to adjust the valuation to make it accurate. Once you have performed your research and know your ideal target price, try to stick to it as closely as you can.

Ebay / online ads

Ebay detail how you can help protect yourself in an extensive guide3. But at the very least always check the sellers feedback. I wouldn’t buy from anyone with less than 98% feedback and at least 100 previous sales. Also, check what those sales were for – you don’t want to fall for someone that’s sold 100 teddy bears, but only one vehicle.

Review the MOT history

Did you know that you can check the past results of a vehicle’s MOT since 2005? This is for all tests in England, Scotland or Wales.

Go to the DVLA website4 and enter the registration of the vehicle. The results include the following:

  • if it passed or failed
  • the mileage recorded when tested
  • what parts failed at each test, and if any parts had minor problems
  • the garage that performed the test
  • when the next MOT is due

By looking at the full history, you can determine how well maintained the vehicle has been. When there’s a consistently high number of advisories on each MOT test you could conclude that the owner(s) skipped essential maintenance.

Outstanding advisories

When a vehicle passes, it doesn’t mean that everything is perfect. There will likely be ‘Advisory notice item(s)’. Here’s a healthy pass with a single advisory:

How to buy a used car – Financial Management – outstanding advisories - tyres

This looks good, but those tyres might cost a lot to replace, so you can haggle the price down further to account for the cost of tyres and your time.

Mileage discrepancies

You can look at the mileage from the oldest to the latest MOT. The mileage should always increase! If the mileage decreases then it’s a sure sign the vehicle has probably been clocked. It could also mean that one of the garages made an error.

What does ‘clocked’ mean?

Someone has tampered with the mileage meter to make it appear to have done fewer miles than it actually has. This can mask the real mileage to allow the seller to get a higher price.

You may need to use some detective skills to look for suspicious increments too. For example if the vehicle has only driven a modest 500 miles in one year, but every other year it was 10,000 miles, this could be an indicator that something isn’t quite ‘normal’.

If you see that the mileage delta between two yearly MOT’s is very low, then you would hope to see few advisories in the last MOT test. If you see a large amount of wear and tear advisories then this could imply the mileage was clocked.

Vehicle tax and insurance estimates

It’s unlikely that someone is now selling the vehicle with tax remaining; you can’t do that any more. The tax isn’t transferred to you when you buy the vehicle. You must tax a vehicle you’ve bought before you drive it, or declare it off the road (a SORN).

You should check before you buy the vehicle to see how expensive the vehicle tax is likely to be. Additionally get an estimate for your insurance.

Vehicle check

Once you have performed all those initial checks, you have reached the point where it’s worth investing a few pounds on a basic vehicle check. If you are planning on parting with a couple of thousand on a vehicle, a basic check for £2-£10 is well worth spending for peace of mind. Common checks will include the following:

  • Stolen vehicle check – detects whether the police national computer lists the vehicle as stolen
  • Insurance write off – see whether the vehicle has been involved in an accident and whether it was too expensive to repair, scrapped etc.
  • Number of previous owners – garages love to use the phrase “one careful owner”. They’re less keen to highlight many owners; it can reduce the value of the vehicle
  • Scrapped check – if the DVLA has scrapped the vehicle then it’s for a good reason. It shouldn’t be on the road and you shouldn’t be buying it
  • Mileage discrepancies – some vehicle check companies will detect mileage discrepancies
  • Number plate changes – Number plates can be changed for personal plates, however they can also be changed to hide the vehicle’s past. It’s important to question plate changes raised by the vehicle check
  • Imported / exported – an imported vehicle can be difficult to find before its registration in the UK. Any vehicle recorded as exported should not be on sale in the UK
  • VIN / chassis check – a discrepancy can be a signal that the vehicle has been stolen, cloned or has encountered serious problems
  • Guarantee – i.e. to cover up to £10,000 to protect you if the details provided in the check were inaccurate

If you’re spending more than £2,000, then you might want to perform an advanced check for around £10-30 – it should include the following:

  • Outstanding finance – if the vehicle you’re buying has outstanding finance you could lose the vehicle and everything you paid for it. This is the main reason to spend more on an advanced vehicle check
  • Logbook check – you can verify that the V5C (‘logbook’) you have is genuine for the vehicle by comparing the V5C number against what’s displayed in the vehicle check. If the V5C does not match then you should not buy the vehicle
  • Guarantee – increased cover, e.g. up to £30,000

Visual inspection

If you’re still interested book an appointment to view the vehicle.

  • Ask to see the V5C and ensure the document lists the seller. Ask for proof of ID. If they’re not a match, find out why they’re selling it on behalf of someone else
  • Check the Vehicle Identification Number (VIN) matches the V5C
  • Ask to see the latest MOT pass certificate. Ensure it’s still valid, pay attention to any outstanding advisories
  • Have a good look outside for dents and rust. Check for chips on the windows and general wear and tear. Do the windscreen wipers/washers work?
  • Look for changes in paint colours, or gaps between panels and bumpers, or welding under the vehicle and engine. Any of these could be a sign that the vehicle has been involved in a crash
  • Pop the bonnet up, check that the engine hasn’t recently been steam cleaned; that could be masking an oil leak. Also, check the engine isn’t hot – you want to start the vehicle from cold to ensure there’s no issue when it has been sitting for a while. If it’s already warm, the seller might have pre-warmed it to help it start first time
  • Now look inside: touch the carpets in the driver and passenger footwells, ensure they’re dry. If they’re not, there could be a leak from the engine into the vehicle itself. Also check for rust under the seats; this is another sign of a leak that has been persistent for a long time
  • Test all the gadgets you can find, including but not limited to the radio, electric mirrors, windows (all of them!), boot and bonnet openers, petrol cap opener and seats
  • After the vehicle has been driven for a while, try to check the air conditioning (heat and cold)
  • Check the interior and exterior lights all work, including indicators and the full beam
  • Before you perform a test drive, ensure that all seat belts work and are in a good condition
  • The legal limit for minimum depth of the tread on your tyres is 1.6 millimetres, across the central ¾ of the tread around the complete circumference of the tyre. For safety reasons it is suggested that you replace your tyres before the legal limit is reached. You should consider replacing the tyres at around 3mm of tread. The ’20pence test’ can help check the tread depth. Once the 20p is inserted into the tread, if you can still see the bumpy border on the coin then the tread is not deep enough. [Editor: some parts of the press have claimed the 20p test is too cautious – I personally like it, as it’s quick and easy, and I’d rather put safety first.] Don’t forget to check the spare too, including the tools (jack)

How to buy a used car – Financial Management – 20 pence rule – depth of tread should be greater than 20p's border width

Always take the vehicle for a test drive

  • If airbags are fitted in the vehicle, then when you turn the key check that warning lights operate as described in the handbook. Normally they will come on with the ignition and then go out shortly afterwards
  • Drive the vehicle with the radio off and with the windows up, so you can listen for internal noises. Later drive with the windows down at slower speeds, you shouldn’t hear any knocks from suspensions, rasping exhausts, squeaks and so on
  • If you hear anything then ask questions to the seller. Don’t let the seller convince you the sounds are ‘normal’. If they try to justify it with phrases like

     

    “oh it’s never done that before – typical huh!”

    then perhaps you can’t trust the seller. If they’re planning to offload the vehicle, they’ll probably say anything that helps them

  • Make sure that it’s not pulling to one side or the other, this could show signs of mechanical problems, or wheel balancing issues
  • If you don’t know much about vehicles, take a friend or family member with you. You may even consider purchasing a roadside vehicle check, through companies like the AA, RAC and GreenFlag. The AA also has a great inspection checklist on their website5

You’re in control, not the seller

When I test drove my latest car I was suspicious of a couple of tyres, a groaning noise like wheel bearings, plus a knock that could be the suspension.

I told the owner I would only buy the car if it went for an MOT first. He refused to take it for an MOT, so I asked for a £500 discount, he settled on a £400 discount.

But, alas, I was on the dark-side by this point. My emotions were telling me it was worth more than it was – I was seeing past the faults and justifying them while imagining me proudly owning the car.

He must have known, look at this list of failures!

How to buy a used car – Financial Management – MOT fail - suspension

I spent in the region of £600 on repairs, so it wasn’t disastrous; the point is that you can haggle.

Paying

There are a few gotchas when it comes to paying, one of the best resources is the Citizens Advice Bureau6.

Haggle

If you performed your research then you will be armed with the knowledge you need to haggle. What do you do if you concluded that the vehicle is worth £2,500 but it’s listed at £3,000? It’s simple, contact the seller and see whether they will accept less. This is haggling. It’s as easy as that!

You should probably walk away if the seller is not willing to compromise after you’ve presented your reasons. Remember, try to filter out vehicles as early as possible; and don’t let your emotions control you.

Of course, there’s a lot of research that you can do to put you in the best position – and that’s covered in this article. We have one last tip to make things easier for you:

How to save time

The time it takes to perform the necessary manual background checks is significant. It also grows in a linear way, for each vehicle that you check – and by the time you’re looking at the fourth or fifth car, perhaps your dark-side emotions are taking hold.

This is where mobile apps like Vehicle Smart [Editor: Rob has written this excellent app] will save you a lot of time. You enter your registration and that’s it. You’re presented with the following:

  • Tax status
  • MOT status
  • MOT history (passes, failures, advisories)
  • Mileage discrepancy chart
  • Vehicle check options for £2.99 or £8.99
  • Ability to add service details
  • Notifications when tax, MOT, services, insurance are due

You can download the app for iOS and Android, or visit the Vehicle Smart website for download links and more details.

And finally

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References  1RAC 1-in-3  2Parkers Guide  3Ebay Advice  4DVLA MOT Check  5AA Checklist  6Citizens Advice Bureau

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